SYDNEY/WELLINGTON: The Australian dollar consolidated recent gains versus the US dollar and euro on Monday with markets awaiting the Australian government's 2014/15 budget expected to show a deficit of around A$30 billion.
The New Zealand dollar found a steadier footing after three sessions of decline.
The Aussie edged lower to $0.9355, from $0.9362 in New York on Friday, having gained nearly 1 percent last week.
It stood near a one-month peak of $0.9395 set Thursday with dealers citing large option selling orders around $0.9410.
Support was seen at $0.9334, the 50 percent retracement of the April-May fall, with resistance around $0.9400.
This week's local spotlight will be on the release of the federal budget Tuesday. A Reuters survey shows forecasts of a deficit of around A$30 billion for 2014-15, down from this year's anticipated deficit of around A$46 billion. A measure of Australian business conditions dipped slightly in April but confidence unexpectedly improved despite the prospect of cuts in the upcoming budget.
The Antipodeans held gains versus the euro which suffered broad losses after the head of the European Central Bank last week opened the door to further easing at its June meeting.
The euro last stood at A$1.4693, near a one-month low of A$1.4644. A break below would take it to the lowest since November.
The euro has shed 10 cents since a peak in January.
The common currency was last at NZ$1.5947, not far from a one-month low of NZ$1.5863 set last week.
It has fallen nearly 5 percent so far this year.
Against its US counterpart, the New Zealand dollar was steady at $0.8620, having touched a one-week low of $0.8604 in Friday's offshore session.
It was marking time ahead of data, a central bank fiscal stability report (FSR), and the government's annual budget.
The kiwi has been on the defensive since the Governor of the Reserve Bank of New Zealand (RBNZ) jawboned the currency and hinted the bank may take its time in raising interest rates further.
"We expect Wednesday's RBNZ FSR to reiterate this point, but for the Budget on Thursday to provide support for the Kiwi," said ANZ analysts in a note. Markets are pricing in an 83 percent chance that the RBNZ will raise rates by 25 basis points to 3.25 percent at its next meeting in June.
They are implying 86 basis points of hikes over a 12-month horizon.
Near term support is seen around the 10-day moving average at $0.8610/15 and below that more substantially at $0.8592, with $0.8640 the first hurdle higher.
The currency was also a touch firmer on cross rates, lifting the trade weighted currency off a two-week low touched on Friday.
The data due this week includes first quarter retail sales, which is expected to see a solid 0.9 percent rise in volumes from the previous quarter's surging 1.2 percent rise.
The RBNZ's financial stability report is expected to reiterate that the bank's limits on low-deposit lending have been effective and will stay, while the budget will show a return to surpluses amid stronger economic forecasts.
New Zealand government bonds were flat.
Australian government bond futures retreated from multi-month highs, with the three-year bond contract down a tick to 97.130. The 10-year contract eased 2 ticks to 96.165, having matched a nine-month peak earlier in the session.
The spread between 10-year Australian and US yields fell to 121 basis points, down from 154 in March.
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